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Understanding the Marketing Process Leonardo Matarrese
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CHAPTER 11
Understanding Marketing Processes and Consumer Behavior
Understanding Marketing Processes and Consumer Behavior
Outline What Is Marketing?
Target Marketing and Market Segmentation
Understanding Consumer Behavior
Organizational Marketing and Buying Behavior
The International Marketing Mix
Small Business and the Marketing Mix
What Is Marketing?
The process of planning and executing the
conception, pricing, promotion, and distribution of
ideas, goods, and services to create exchanges
that satisfy individual and organizational objectives
The 4 P’s of Marketing Product, Price, Promotion
and Place.
MarketingGoods, Services, & Ideas Consumer Goods
Products purchased by consumers for personal use
Industrial Goods
Products purchased by companies to produce other products
Services
Intangible products, such as time, expertise, or an activity, that can be purchased
Relationship Relationship MarketingMarketing
Marketing strategy Marketing strategy that emphasizes that emphasizes lasting relationships lasting relationships with customers and with customers and supplierssuppliers
The Marketing Environment External Environment
Outside factors that influence marketing programs by posing opportunities or threats
Five environmental factors: Political-Legal Environment Social-Cultural Environment Technological Environment Economic Environment Competitive Environment
The External Marketing Environment
10 - 10 - 66
The Firm and Its Marketing Plan Plans Strategies Decisions
CompetitiveEnvironment
Political & LegalEnvironment
Social &Cultural
Environment
EconomicEnvironment
TechnologicalEnvironment
Competitive Environment Substitute Product
Product that is dissimilar to those of competitors but that can fulfill the same need
Brand Competition
Competitive marketing that appeals to consumer perceptions of similar products
International Competition
Competitive marketing of domestic products against foreign products
Planning & Executing Marketing Strategy Marketing Managers
Typically responsible for planning and implementing all the marketing activities that result in the transfer of goods or services to its customers
Marketing Plan
Detailed and focused strategy for gearing the marketing efforts to meet consumer needs and wants
Developing the Marketing Plan
Setting Goals for Performance
The Marketing Mix
ProductProduct
Good, service, or idea that is marketed to fill consumer needs Good, service, or idea that is marketed to fill consumer needs and wantsand wants
Product DifferentiationProduct Differentiation
Creation of a product or product image that differs enough from Creation of a product or product image that differs enough from existing products to attract consumersexisting products to attract consumers
The combination of product, pricing, promotion, and distribution strategies used to market products
The Marketing Mix
PricingPricing
Selecting the most appropriate price at which to sell a productSelecting the most appropriate price at which to sell a product
PromotionPromotion
Techniques for communicating information about products Techniques for communicating information about products (advertising, personal selling, sales promotions, public (advertising, personal selling, sales promotions, public relations)relations)
Place (Distribution)Place (Distribution)
Getting products from producers to consumersGetting products from producers to consumers
The combination of product, pricing, promotion, and distribution strategies used to market products
Target Marketing & Market Segmentation
Target MarketTarget Market
Group of people that has similar wants and Group of people that has similar wants and needs and that can be expected to show needs and that can be expected to show interest in the same productsinterest in the same products
Market SegmentationMarket Segmentation
Process of dividing a market into categories of Process of dividing a market into categories of customer types customer types
Identifying Market SegmentsGeographic VariablesGeographic Variables
Geographical units that may be considered in developing a Geographical units that may be considered in developing a segmentation strategysegmentation strategy
Demographic VariablesDemographic Variables
Characteristics of populations that may be considered in Characteristics of populations that may be considered in developing a segmentation strategydeveloping a segmentation strategy
Psychographic VariablesPsychographic Variables
Consumer characteristics, such as lifestyles, opinions, interests, Consumer characteristics, such as lifestyles, opinions, interests, and attitudesand attitudes
Product Use VariablesProduct Use Variables
Consumer characteristics based on the ways in which a product is Consumer characteristics based on the ways in which a product is used, the brand loyalty it enjoys, and the reasons for which it is used, the brand loyalty it enjoys, and the reasons for which it is purchasedpurchased
Marketing Research
The study of consumer needs and wants and the ways in which sellers can best meet them
Market Research and the Marketing Process
10 - 10 - 1414
MARKETINGMARKETINGRESEARCHRESEARCH
Controllable Marketing Variables
• Product• Pricing• Promotion• Place
Environmental Factors
• Economic• Technological• Competitive• Political & Legal• Social & Cultural
• Consumers• Employees
• Investors• Suppliers
• Local Communities
Marketing Managers• Market Segmentation• Target Market Segmentation
• Marketing Plan• Goals for Performance
Assessing Information
Needs
Providing Information
Making Decisions
Stakeholders
The Research Process Study the Current Situation
Select a Research Method
Collect Data
Analyze the Data
Prepare a Report
Secondary DataSecondary DataData readily available as a Data readily available as a result of previous researchresult of previous research
Primary DataPrimary DataData developed Data developed through new researchthrough new research
Research Methods ObservationObservation
Market research technique that involves simply watching and Market research technique that involves simply watching and recording consumer behaviorrecording consumer behavior
SurveySurvey
Market research technique using a questionnaire that is either Market research technique using a questionnaire that is either mailed to individuals or used as the basis of interviewsmailed to individuals or used as the basis of interviews
Focus GroupFocus Group
Market research technique in which a group of people is Market research technique in which a group of people is gathered, presented with an issue, and asked to discuss it in gathered, presented with an issue, and asked to discuss it in depthdepth
ExperimentationExperimentation
Market research technique that attempts to compare the Market research technique that attempts to compare the responses of the same or similar people under different responses of the same or similar people under different circumstancescircumstances
UnderstandingConsumer Behavior
Consumer BehaviorVarious facets of the decision process by which customers come to purchase and consume products
Influences on Consumer Behavior Psychological Personal Social Cultural
Brand LoyaltyBrand Loyalty
Pattern of regular consumer purchasing based Pattern of regular consumer purchasing based on satisfaction with a producton satisfaction with a product
The Consumer Buying ProcessPersonal & Environmental Factors
PsychologicalPsychological PersonalPersonal SocialSocial CulturalCultural
Stages of the Consumer Buying ProcessStages of the Consumer Buying Process
Evaluation of Alternatives
Which are comfortable?
Which are affordable?
How will others react to them?
Evaluation of Alternatives
Which are comfortable?
Which are affordable?
How will others react to them?
Information Seeking
Search for stores, styles,
prices, opinions of
others
Information Seeking
Search for stores, styles,
prices, opinions of
others
Problem Recognition
Need to replace old
shoes
Problem Recognition
Need to replace old
shoes
Purchase DecisionChoose
rationally or emotionally
Purchase DecisionChoose
rationally or emotionally
Postpurchase DecisionObserve
reactions of others; test durability,
compare with older shoes
Postpurchase DecisionObserve
reactions of others; test durability,
compare with older shoes
Marketing Factors
ProductProduct PricingPricing PromotionPromotion PlacePlace
10 - 10 - 1919
The Consumer Buying Process Problem/Need Recognition Information Seeking Evaluation of Alternatives
– Emotional– Rational
Purchase Decision Postpurchase Evaluations
Organizational Marketing & Buying Behavior
Organizational (or Commercial) Markets have buying behaviors that are different from those found in consumer markets and are much less observable by the public.
Organizational MarketsIndustrial Market
Firms that buy goods that are either converted into products or used during production
Reseller Market
Intermediaries who buy and resell finished goods
Government Market
Federal, state, local governments (municipalities, counties, townships, and school districts)
Institutional Market
Nongovernmental buyers of goods and services (hospitals, churches, museums, and charitable organizations)
Organizational Buying Behavior Demand
The willingness and ability of buyers to purchase a good or service. The two major
Differences in Demand
Differences in demand between consumer and industrial products are derived demand and inelasticity of demand
Derived Demand
Demand for industrial products that results from demand for consumer products
Inelastic Demand
Demand for industrial products that is not largely affected by price changes
Differences in BuyersUnlike most consumers, organizational buyers are professional, specialized, and expert (or at least well informed):
ProfessionalsOrganizational buyers trained in arranging buyer-seller relationships, negotiating purchase terms, arranging for formal contracts
SpecialistsIndustrial buyers are company specialists in a line of items
ExpertsIndustrial buyers who are experts about the products they are buying
Stages in the Buying ProcessStages in the Buying Process
Postpurchase Evaluation of product and
evaluation of supplier
Postpurchase Evaluation of product and
evaluation of supplierPurchase Decision
Purchase Decision
Information Seeking
Information Seeking
The Industrial Buying Process
10 - 10 - 2525
Problem Recognition
Problem Recognition
Developing Product
Recognition
Developing Product
Recognition
Evaluation of Alternatives using
product specification
Evaluation of Alternatives using
product specification
Differences in Decision Making
Developing Product Specifications
Evaluating Alternatives
Making Postpurchase Evaluations
Differences in the Buyer-Seller Relationship
The InternationalMarketing Mix
International Products
International Pricing
International Promotion
International Distribution
Small Business and the Marketing Mix
Small-Business Products
Small-Business Pricing
Small-Business Promotion
Small-Business Distribution